Canola is leaving Canadian ports at a faster pace than last year despite vastly reduced sales to the former top market.
Exporters shipped out 2.01 million tonnes through week 12 of the 2019-20 campaign, up slightly from the 1.98 million tonnes the same time last year.
That is despite oilseed sales to China plummeting.
The Canadian Grain Commission only has country-specific export statistics for August and September.
They show China purchased 182,600 tonnes of Canadian canola in those two months compared to 617,400 tonnes in the same period a year ago.
But other longstanding customers like the United Arab Emirates (UAE), Japan and Mexico are buying more.
Brian Innes, vice-president of public affairs with the Canola Council of Canada, said the strong sales program can be attributed to one main factor.
“Canola is cheap and so there has been strong demand off the west coast,” he said.
“Canola is very attractively priced relative to other oilseeds.”
Surprisingly, China is still the third largest buyer of Canadian canola. And that doesn’t count how much seed is making its way to China in a roundabout fashion.
Cargill market analyst Dave Reimann said that “a few boats are still loading for China, but it’s not going to add up to 4-million tonnes, the way it has in the past.”
The UAE purchased 168,500 tonnes of Canadian canola the first two months of the new crop year, up from 18,400 tonnes during the same period a year ago.
Innes said, “They’re crushing our canola and sending the oil to China and the meal goes generally to other destinations in Asia.”
Japan is typically Canada’s most reliable customer. It usually buys the same amount of canola from year-to-year.
But in the first two months of the current crop year the country bought 316,700 tonnes of the oilseed, a 41 percent increase over the same period a year ago.
Pakistan and Bangladesh are also taking increased volumes, as well as strong European purchases are bolstering exports.
“This could have been a lot worse,” said Reimann.
“Poor crops in Australia and Europe have definitely helped the demand for canola this year,” said Reimann.
Mexico is a steady buyer but the volumes tend to fluctuate based on crush margins of canola versus soybeans.
Canola crush margins must be good because Mexico imported 190,100 tonnes of Canadian canola in the first two months, also a 41 percent increase over the same period last year.
Innes emphasized that it is hard to extrapolate what a full-year export program will look like based on a couple of months of data.
Reimann said that with domestic crushers working at current levels the support for meal has to be remaining strong.
U.S. dairy industry has traditionally been a good market, however it’s not clear if that is currently the case.
Canola is generally shipped in 75,000 tonne lots out of the Port of Vancouver. That could be three months of supply for a Japanese crusher, so the October/November totals could drop accordingly.
Reimann said even though the pace has been better than last season it would still have a long way to go to if the Canadian industry was to avoid a large carryout on the farms.
“While it could have been worse, I’m still a little disappointed (with exports), I thought they might even have been better so far,” he said.